Things on the U.K. Treasury Report on Britain’s EU Membership

The U.K. Treasury published its long-awaited analysis of the costs and benefits of Britain’s membership of the European Union on Monday. Campaigners hoping to persuade Britons to vote in favor of staying in the bloc in a referendum on June 23 believe the potential cost to the economy of “Brexit” is one of their strongest cards. Advocates of leaving say the U.K. will ultimately be better off outside the EU. Here are five key conclusions of the Treasury’s 202-page report:

In 1973 the U.K. joined the European Economic Community, which later developed into the European Union with the signing of the Maastricht Treaty in 1993. The Treasury analysis concludes membership has brought “significant economic benefits” for Britain, particularly in terms of trade and foreign investment. It estimates that U.K. trade with the EU is around 75% greater than it would have been had the U.K. never joined, and points out that the U.K. is the EU’s top destination for foreign investment.

The Treasury analysis suggests that by 2030 the U.K. economy would be between 3% and 8% smaller if it left the EU than if it stayed a member, depending on the terms of any post-Brexit relationship with its neighbors. That cost would be smallest if the U.K. enjoyed access to the EU’s single market on a similar basis to Norway, which pays into the EU budget and accepts free movement rules but doesn’t participate in the EU’s decision-making institutions.

3A Smaller Economy Could Mean a Direct Cost for British FamiliesShare on Twitter

The Treasury said its estimates of the cost to the economy of leaving the EU adds up to about £4,300 ($6,106) per household by 2030. The Treasury says the cost to the economy of leaving would be felt through lower trade, lower investment leading to weaker productivity, and higher prices for some goods and services due to new tariffs and other trade restrictions.

Proponents of quitting the EU argue that leaving the U.K. would mean more money to spend on public services because the U.K. would no longer need to make annual contributions into the EU budget. Not so, says the Treasury, since a smaller economy post-Brexit would mean weaker tax receipts. It put the loss to the public purse at between £20 billion and £45 billion a year, again depending on the precise nature of the U.K.’s future relationship with the EU.

The Treasury’s main analysis assumed no further EU reform. But officials also looked at the possible gain to the British economy if the EU followed through on promises to cut red tape for business, bring down internal barriers to trade in services in which the U.K. excels, and complete big trade deals such as the Transatlantic Trade and Investment Partnership with the U.S. That could boost U.K. national income by 4% by 2030, it said.

Advocates of Brexit have disputed the Treasury’s claims, and insist that the U.K. would be better off if it left the EU because it would be free of burdensome EU regulation and could ink trade deals of its own with faster-growing parts of the world. They also say it is unlikely the U.K. would be denied access to the EU single market after Brexit.